Two advocacy groups are asking the federal cabinet to overturn the telecom regulator’s approval of the transfer of Shaw Communications Inc.’s SJR-B-T broadcasting services to Rogers Communications Inc. RCI-B-T
The Canadian Radio-television and Telecommunications Commission last month approved Rogers’ acquisition of Shaw’s broadcasting distribution business with some conditions, clearing the first of three regulatory hurdles facing the Toronto-based telecom’s $26-billion takeover of Calgary-based Shaw. The decision came after a public proceeding that heard from a number of stakeholders, including consumer advocates and rival telecoms.
In approving the transfer, the CRTC said the deal, with the conditions it has stipulated, is in the public interest because it would advance objectives of the Broadcasting Act such as encouraging the development of programming that reflects Canadian culture.
However, a petition filed Wednesday by the Public Interest Advocacy Centre (PIAC) and the National Pensioners Federation asks Ottawa to set the decision aside or send it back to the CRTC for reconsideration, arguing that the merger will result in higher prices for television services. PIAC is an Ottawa-based consumer advocacy group, while the National Pensioners Federation advocates for seniors and retirees.
The groups argue in their petition to cabinet that the regulator’s decision “exposes approximately one million Shaw customers to significant price increases for delivery of essentially the same service – paid TV.”
Rogers has stated in various submissions that, if its merger succeeds, it plans to transition most of Shaw’s cable TV-only and satellite TV customers its own IPTV service, the petition states. Shaw customers who currently pay only for TV service would therefore also be billed for the underlying Internet service used to deliver IPTV, the groups state: “It is, in essence, a ‘forced march’ to IPTV.”
John Lawford, PIAC’s executive director, said the petition stems from the group’s concern that the CRTC “failed to impose enforceable conditions to protect consumer affordability of TV services.”
A spokesperson for Rogers did not immediately respond to a request for comment.
Shaw’s broadcasting distribution business includes a satellite TV service called Shaw Direct, and cable television services in British Columbia, Alberta, Saskatchewan and Manitoba.
The conditions that the CRTC has set require Rogers to pay $27.2-million to a variety of funds that support the creation of Canadian content and local broadcast news, such as the Canada Media Fund and the Independent Local News Fund.
The CRTC is one of three federal bodies whose approval is required for the merger to proceed. The Competition Bureau is reviewing whether the takeover would substantially reduce competition, while the Ministry of Innovation, Science and Economic Development (ISED) is reviewing the transfer of spectrum licences from Shaw to Rogers. (Spectrum refers to the airwaves used to transmit wireless services.)
Both companies have said they expect the deal to close in the first half of this year.
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